Recently, Bullish breakout above 1.2265 has enhanced many bullish movements up to the price levels of 1.2520-1.2590 where temporary bearish rejection as well as a sideway consolidation range were established (In the period between March 27- May 12).
Shortly after, transient bearish breakout below 1.2265 (Consolidation Range Lower Limit) was demonstrated in the period between May 13 – May 26.
However, immediate bullish rebound has been expressed around the price level of 1.2080.
This brought the GBPUSD back above the depicted price zone of 1.2520-1.2600 which failed to offer sufficient bearish rejection.
Hence, short-term technical outlook has turned into bullish as well, further bullish advancement was expressed towards 1.2780 (Previous Key-Level) where signs of bearish rejection were expressed.
Short-term bearish pullback was expressed, initial bearish destination was located around 1.2600 and 1.2520.
Moreover, a bearish Head & Shoulders pattern (with potential bearish target around 1.2265) was recently demonstrated on the chart.
That’s why, bearish persistence below 1.2500 ( neckline of the reversal pattern ) paused the bullish outlook for sometime & enabled further bearish decline towards 1.1265.
However, significant bullish rejection around 1.2265 brought the GBP/USD pair back towards 1.2600 – 1.2620 where a cluster of resistance levels are located.
Signs of bearish rejection should be watched around the current price zone of 1.2550-1.2620 (recent supply zone) as it indicates a high probability of bearish reversal.
Trade recommendations :
Intraday traders can consider the current bullish pullback towards the depicted Supply Zone (1.2550-1.2620) for a valid SELL Entry.
Stop Loss should be placed above 1.2650 while T/P level to be located around 1.2450 & 1.2265.